In the most ambitious study of food system economics so far, leading economists and scientists chart how the hidden costs of the global food system will continue to mount in the future unless we see major shifts in policy and practice.
Download the full report HERE.
- Transforming global food systems could create 5-10 trillion USD of economic benefits every year.
- Food systems are currently destroying more value than they create – with inefficient and fragmented policies leading to hidden health and environmental costs upwards of 10 trillion USD per year.
- Fixing food systems requires an overhaul of food system policies, investment in innovation and enabling people to eat healthier and more environmentally sustainable diets.
- The cost of transformation is small compared to its multi-trillion dollar benefits.
- New economic modelling finds that food systems are a uniquely powerful means of addressing global climate, nature and health emergencies at the same time – while offering a better life to hundreds of millions of people.
The global food system does the crucial work of producing and distributing food to a growing population, but its hidden costs – caused by undernutrition, productivity loss and environmental damage – are currently estimated as equivalent to 10% of global GDP annually, higher than the system’s contribution to economies.
In the most ambitious study of food system economics to date, leading economists and scientists from the Food System Economics Commission (FSEC) chart how the hidden costs of the global food system will continue to mount in the future unless we see major shifts in policy and practice. They show how transforming the global food system could instead present an opportunity of up to 10 trillion USD per year and how the costs of accessing this opportunity are relatively small compared to the potential benefits.
Opportunity to turn costs into contribution
FSEC – a joint initiative by the Potsdam Institute for Climate Impact Research (PIK), The Food and Land Use Coalition (FOLU), and EAT – has brought together leading experts on the economics of climate change, health, nutrition, agriculture, and natural resources to develop a unique economic model. It provides the most comprehensive modelling of the impacts of two possible futures for the global food system to date: our Current Trends pathway, and the Food System Transformation pathway.
In the Current Trends pathway, by 2050 food insecurity will leave 640 million people (including 121 million children) underweight in some parts of the world, while obesity will increase by 70% globally. Food systems will continue to drive a third of global greenhouse gas emissions, which will contribute to 2.7 degrees of warming by the end of the century compared to pre-industrial periods. Food production will become increasingly vulnerable to climate change, with the likelihood of extreme events dramatically increasing.
However, FSEC also finds that the food system can instead be a significant contributor to economies, and drive solutions to health and climate challenges. In the Food System Transformation pathway, economists model that by 2050 better policies and practices could lead to undernutrition being eradicated, and cumulatively 174 million lives saved from premature death due to diet-related chronic disease. Food systems could become net carbon sinks by 2040, helping to limit global warming to below 1.5 degrees by the end of the century, protecting an additional 1.4 billion hectares of land, almost halving nitrogen surplus from agriculture, and reversing biodiversity loss. Furthermore, 400 million farm workers across the globe could enjoy a sufficient income.
FSEC also quantified the cost of achieving this transformation – estimated at the equivalent of 0.2-0.4 percent of global GDP per year – which is small relative to the multi-trillion dollar benefits it could bring.
Johan Rockström, Principal of FSEC and Director of PIK, said: “The costs of inaction to transform the broken food system will probably exceed the estimates in this assessment, given that the world continues to rapidly move along an extremely dangerous path whereby it is likely to not only breach the 1.5°C limit, but also face decades of overshoot, before potentially coming back to 1.5°C by the end of this century. Overshoot, even of 0.1-0.3 degrees, will add massive social costs across the world. Moreover, the only way to return back to 1.5°C is to phase out fossil-fuels, keep nature intact and transition food systems from source to sink of greenhouse gases. The global food system thereby holds the future of humanity on Earth in its hand.”